What is the biggest drain of cash from your business? Usually most costs in small business are easy to anticipate such as rent, utility bills, payroll and insurance. But other expenses can quickly creep in, and revenue is always a bit of a soft target to hit. Some small business may struggle with late payments from big clients, or be experiencing a higher rate of staff turnover due to seasonal issues. It’s important to stay on top of these issues, so keep thinking of ways to stabilize your business and consider these steps for saving money in your small business.
1. Go paperless. Paper is an antiquated communication method that has long since been supplanted by computerized system, mobile technology, and dynamic applications. By running a paperless office, you can lower storage costs, printing costs and improve the efficiency of your small business operations. Plenty of cloud-based applications allow you to send and share information securely, which will save your business both time and money.
2. Lease equipment. Operating capital is often used unnecessarily for the big upfront costs that small businesses face when buying expensive equipment, so consider a lease instead. This move helps conserve the cash on hand for your small business but also helps save substantially in terms of repairs, maintenance and upgrades.
3. Ask for discounts. Your suppliers are in the business of retaining customers, too. Many suppliers and vendors who are confident in their customer’s size and ability to pay monthly debts will extend quantity discounts of 50 percent or more depending on the terms. Always ask suppliers and vendors about discounts and what conditions your small business must meet in order to qualify for them.
4. Switch banks. Banks have been notoriously stingy with credit during the recession and have been strategizing to squeeze more revenue out of fees to make up for regulatory changes. Shop around at different banks and lending institutions to avoid fees like ATM surcharges, bounced check fees and debit card fees.
5. Go virtual. There’s no sense in paying for services or space that you don’t use. If your receptionist is reading a book half the time, maybe your volume of incoming calls is low enough that you can utilize a virtual assistant to field your incoming calls instead. The same principle applies with office space or meeting space. If you’re not using it consistently, then why are you paying for it? Rent conference space as needed instead and only pay for the services and real estate that your small business is actively using.
6. Offer electronic invoices. There’s no sense in sending paper or even fax invoices. Electronic invoices can be sent directly through advanced, easy-to-use applications like Sage, which can reduce your company’s print and postage costs.
7. Track and manage employee spending. Employees misuse company-issued credit cards all the time, sometimes by accident. By setting clear guidelines, activating pre-set limits and email & text alerts and monitoring your credit and bank accounts carefully, you can save money and potentially avoid costly mistakes.
